CFTC adopts amendments to position limit aggregation rules

2017 ◽  
Vol 18 (2) ◽  
pp. 31-35
Author(s):  
J.P. Bruynes ◽  
Jason Daniel ◽  
Libbie Walker
Keyword(s):  
Design Methodology ◽  
Final Position ◽  
Limited Time ◽  
Futures Trading ◽  
Content Type ◽  
Final Rule ◽  
Commodity Futures Trading Commission ◽  
Practical Guidance ◽  
Trading Program ◽  
Independent Account

Purpose To explain the final position limit aggregation rules and exemptions pertaining to derivative positions in nine agricultural commodities adopted by the Commodity Futures Trading Commission on December 5, 2016 and effective February 14, 2017, the notice filing deadline with respect to which was extended by the CFTC by limited time no-action relief until August 14, 2017. Design/methodology/approach Explains the position limit aggregation rules and exemptions pertaining to equity interests in owned entities, ownership or equity interests in pooled accounts or positions, positions of an “eligible entity” in connection with client positions carried by an “independent account controller,” positions held by futures commission merchants (FCMs) in discretionary accounts or customer trading program accounts, equity interests of underwriters based on unsold allotments of securities in distributions, broker-dealers if the equity interest is acquired in the normal course of business and positions for which information cannot be collected without risk of violating a law. Findings Unless an exemption from aggregation is available, all positions in accounts for which any person controls the trading or holds a 10 per cent or greater ownership or equity interest must be aggregated with positions held, and trading done, by such person. The final rule adds several new exemptions, including for persons with a 10 per cent or greater ownership or equity interest in an entity so long as certain conditions establishing independence are met. The final rule requires notice filing to take advantage of most exemptions from aggregation. Originality/value Practical guidance from experienced lawyers specializing in securities, funds, and investment management.

CFTC clarifies and expands relief relating to delegation of commodity pool operator responsibilities

2015 ◽  
Vol 16 (1) ◽  
pp. 69-73
Author(s):  
Cary Meer ◽  
Lawrence B. Patent
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Commodity Futures ◽  
Investment Management ◽  
Futures Trading ◽  
Content Type ◽  
Commodity Futures Trading Commission ◽  
Practical Guidance

Purpose – To explain CFTC No-Action Letter 14-126, issued on October 15, 2014 by the Commodity Futures Trading Commission Division of Swap Dealer and Intermediary Oversight, which sets forth a number of conditions with which a commodity pool operator (“CPO”) that delegates its CPO responsibilities (“Delegating CPO”) to a registered CPO (“Designated CPO”) must comply in order to take advantage of no-action relief from the requirement to register as a CPO. Design/methodology/approach – Explains the modified conditions provided by Letter 14-126, including clarification of the permissible activities in which a Delegating CPO seeking to take advantage of registration no-action relief may engage regarding investment management, solicitation, and management of pool property; lists other criteria carried over from Letter 14-69 of May 12, 2014; provides analysis and discusses limitations of the relief provided by the CFTC No-Action letter. Findings – The letter makes more liberal several of the conditions set forth in CFTC Letter 14-69 of May 12, 2014, with which many Delegating CPOs could not comply. Originality/value – Practical guidance from experienced financial services lawyers.

Commodity Futures Trading Commission provides new streamlined process for commodity pool operators to request no-action relief for delegating certain activities to registered CPOs

2014 ◽  
Vol 15 (3) ◽  
pp. 41-46
Author(s):  
Walid Khuri ◽  
Robert M. McLauglin ◽  
David S. Mitchell ◽  
David W. Selden
Keyword(s):  
Asset Management ◽  
Design Methodology ◽  
Commodity Futures ◽  
Futures Trading ◽  
Commodity Exchange ◽  
Content Type ◽  
Commodity Futures Trading Commission ◽  
Practical Guidance

Purpose – To provide an overview of a new, streamlined process from the Division of Swap Dealer and Intermediary Oversight (DSIO) of the Commodity Futures Trading Commission (CFTC) by which a commodity pool operator (CPO) may request expedited no-action relief for failure to register under Section 4m(1) of the Commodity Exchange Act if such CPO has designated another, registered CPO to serve as the CPO of the commodity pool. Design/methodology/approach – Explains the background to the CPO registration no-action relief related to CPO delegation and the streamlined process for requesting no-action relief, including the procedure for requesting relief and the applicable criteria that must be satisfied to utilize the streamlined process. Findings – By providing an alternative, streamlined process for requesting no-action relief from CPO registration in the context of delegation arrangements in certain circumstances, the CFTC staff is attempting to facilitate obtaining such relief, particularly since relief may be sought on behalf of multiple commodity pools by means of a single request. However, the criteria that must be fulfilled in order to utilize the streamlined process are not necessarily applicable to all CPOs and in all scenarios. Thus, certain CPOs may need to request no-action relief outside of the new, streamlined process or consider alternative fund structures. Originality/value – Practical guidance from experienced asset management lawyers.

CFTC enforcement trends in 2017 and considerations for 2018

2018 ◽  
Vol 19 (3) ◽  
pp. 17-21
Author(s):  
Peter Malyshev ◽  
Jennifer Achilles ◽  
Jill Ottenberg ◽  
Jessica Stumacher
Keyword(s):  
Design Methodology ◽  
Commodity Futures ◽  
Futures Trading ◽  
Content Type ◽  
Commodity Futures Trading Commission ◽  
Recent Trends ◽  
Enforcement Activity

Purpose This paper aims to discuss the types of cases that were brought by the Commodity Futures Trading Commission (CFTC) in 2017 and what to expect in 2018. Design/methodology/approach This paper discusses the overall statistics regarding enforcement actions brought by the CFTC, as well as the amount of restitution, disgorgement and penalties collected in 2017. These statistics are contrasted with the same statistics from 2016. This paper also discusses the types of enforcement actions brought by the CFTC in 2017 and identifies and analyzes trends. The analysis also includes a discussion of what to expect in 2018. Findings This paper concludes that 2017 was a year filled with personnel changes and vacancies at the CFTC, which resulted in no major policymaking cases being brought by the CFTC. This paper also finds that the CFTC is focused on actively monitoring the markets, and will continue to pursue actions involving reporting violations, fraud, manipulation, cryptocurrencies, and disruptive trade practices while rewarding parties for self-reporting and cooperation. Originality/value This paper contains valuable information from experienced lawyers regarding personnel changes at the CFTC, recent trends in CFTC enforcement activity and what to expect in 2018.

SEC proposes “pay-for-performance” disclosure rule

2015 ◽  
Vol 16 (3) ◽  
pp. 24-27
Author(s):  
David H. Engvall ◽  
Reid S. Hooper ◽  
Keir D. Gumbs ◽  
David B.H. Martin
Keyword(s):  
Design Methodology ◽  
Pay For Performance ◽  
Wall Street ◽  
Public Companies ◽  
Content Type ◽  
Consumer Protection Act ◽  
Technical Requirements ◽  
Disclosure Requirements ◽  
Final Rule ◽  
Practical Guidance

Purpose – To outline and summarize the new disclosure requirements under the Securities and Exchange Commission’s proposed pay-for-performance rule, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Design/methodology/approach – This article highlights the proposed new disclosure requirements, while briefly discussing the technical requirements under the rule. The article concludes with a summary of the next steps in the rulemaking process followed by our observations of various issues raised by the proposed new disclosure requirement. Findings – While the contours of any new disclosure requirements will depend on the specifics of the final rule, the pay-for-performance rule, as proposed, would represent a significant new annual disclosure obligation for many public companies. Originality/value – Practical guidance from experienced securities and capital markets attorneys.

The CFTC turns to insider trading enforcement

2016 ◽  
Vol 17 (2) ◽  
pp. 66-69
Author(s):  
Scott Himes
Keyword(s):  
Insider Trading ◽  
Design Methodology ◽  
Futures Trading ◽  
Content Type ◽  
Regulatory Rule ◽  
Commodity Futures Trading Commission ◽  
Trading Activities ◽  
Enforcement Authority ◽  
Practical Implications ◽  
Commodities Markets

Purpose To alert participants in the commodities markets to an important development in the exercise of enforcement authority by the Commodity Futures Trading Commission. Design/methodology/approach Explains a recent proceeding which resulted in the CFTC’s first-ever application of a newly-promulgated regulatory Rule to punish “insider trading” involving the commodities markets. Findings The CFTC has shown that it intends to apply its new Rule aggressively to address insider trading in the commodities markets. Practical implications As a result of the CFTC’s new enforcement approach to regulating insider trading in the areas under its jurisdiction, all participants in the commodities markets must be attuned to the prohibition on insider trading, familiar with actions that might be deemed unlawful insider trading, and act accordingly to avoid improper trading activities. Originality/value Practical guidance for participants in the commodities markets from an experienced attorney with expertise in government enforcement matters.

CFTC amends chief compliance officer duties and annual report requirements

2019 ◽  
Vol 20 (1) ◽  
pp. 10-16
Author(s):  
Julian E. Hammar
Keyword(s):  
Annual Report ◽  
Securities And Exchange Commission ◽  
Futures Trading ◽  
Content Type ◽  
The Public ◽  
Close Analysis ◽  
Compliance Officers ◽  
Final Rule ◽  
Commodity Futures Trading Commission ◽  
Compliance Officer

Purpose This paper summarizes the requirements of rule amendments promulgated by the Commodity Futures Trading Commission (CFTC) in 2018 regarding the duties of Chief Compliance Officers (CCOs) of swap dealers, major swap participants, and futures commission merchants (collectively, Registrants) and the requirements for preparing, certifying and furnishing to the CFTC the CCO’s annual report. Design/methodology/approach This paper provides a close analysis of the CFTC’s final rule amendments that make clarifications regarding the CCO’s duties and seek to harmonize with similar rules of the Securities and Exchange Commission (SEC) applicable to security-based swap dealers.It also analyzes rule amendments for the CCO’s report that provide clarifications and simplify certain requirements.In each case, it discusses comments from the public and the CFTC’s responses to those comments. Findings This paper finds that the rule amendments provide a number of helpful clarifications and simplify certain existing requirements for Registrants and their CCOs subject to the rules.While the rules overall achieve greater harmonization with similar rules of the SEC governing CCOs of security-based swap dealers, this paper notes that care will need to be taken by CFTC Registrants who also become registered with the SEC to be cognizant of remaining differences between the CFTC’s and SEC’s rules in order to ensure compliance with the rules of each agency. Originality/value This paper provides valuable information regarding the duties of CCOs of Registrants and CCO annual report requirements from an experienced lawyer focused on commodities, futures, derivatives, energy, corporate, and securities regulatory matters.

CFTC enters the market for anti-corruption enforcement

2019 ◽  
Vol 20 (3) ◽  
pp. 32-38
Author(s):  
Alice S. Fisher ◽  
Douglas K. Yatter ◽  
Douglas N. Greenburg ◽  
William R. Baker III ◽  
Benjamin A. Dozier ◽  
...  
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Department Of Justice ◽  
Futures Trading ◽  
Voluntary Reporting ◽  
Content Type ◽  
The Us ◽  
Complex Landscape ◽  
Commodity Futures Trading Commission ◽  
And Training

Purpose This paper aims to analyze the March 6, 2019 enforcement advisory in which the Division of Enforcement (Division) of the US Commodity Futures Trading Commission (CFTC or Commission) announced that it will work alongside the US Department of Justice (DOJ) and other agencies to investigate foreign bribery and corruption relating to commodities markets. Design/methodology/approach This paper explains the enforcement advisory and outlines key considerations for industry participants and their compliance teams, including the CFTC’s plan to investigate in parallel with other enforcement authorities, an expansion of the CFTC’s existing self-reporting, cooperation and remediation policy to address foreign corruption and the CFTC’s focus on market and economic integrity, and provides guidelines for commodities companies concerning anti-corruption compliance and training programs, investigating potential incidents of bribery and corruption, reporting obligations under the Commodity Exchange Act (CEA) and CFTC regulations, voluntary reporting of incidents of foreign corruption and whistleblowing. Findings The CFTC announcement adds a new dimension to an already crowded and complex landscape for anti-corruption enforcement. A range of industries, including energy, agriculture, metals, financial services, cryptocurrencies and beyond, must now consider the CFTC and the CEA when assessing global compliance and enforcement risks relating to bribery and corruption. Originality/value Expert guidance from lawyers with broad experience in white collar defense, investigations, financial services, securities, commodities, energy and derivatives.

CFTC modernizes Rule 1.31 recordkeeping requirements

2017 ◽  
Vol 18 (4) ◽  
pp. 45-49 ◽  
Author(s):  
David S. Mitchell ◽  
Robert M. McLaughlin ◽  
William J. Breslin ◽  
Victoria T. Mazgalev ◽  
Scott I. Golden
Keyword(s):  
Design Methodology ◽  
New Technologies ◽  
Commodity Futures ◽  
Futures Trading ◽  
Commodity Exchange ◽  
Content Type ◽  
Technological Developments ◽  
Practical Guidance ◽  
Practical Impact

Purpose To provide an overview of the Commodity Futures Trading Commission’s (the “CFTC” or “Commission”) recent amendments to CFTC Rule 1.31, which sets forth recordkeeping requirements for all records required to be kept pursuant to the Commodity Exchange Act (“CEA”) and Commission regulations. Design/methodology/approach This article discusses the significant May 2017 amendments to CFTC Rule 1.31 and the practical impact of these amendments for entities subject to the rule’s requirements. Findings The CFTC’s recordkeeping amendments do not impose any new substantive recordkeeping requirements, but modernize and make technology neutral the form and manner in which regulatory records must be kept. By eliminating a number of prescriptive and outdated requirements, the amendments should provide greater flexibility to “records entities” to adopt new technologies in response to evolving technological developments. Originality/value Practical guidance from experienced commodities, futures and derivatives lawyers.

Whistling fast and furious: SEC and CFTC continue to issue awards

2016 ◽  
Vol 17 (3) ◽  
pp. 28-30
Author(s):  
Mark Srere ◽  
Jennifer Mammen
Keyword(s):  
Design Methodology ◽  
Securities And Exchange Commission ◽  
Lessons Learned ◽  
Publicly Traded ◽  
Futures Trading ◽  
Content Type ◽  
Publicly Traded Companies ◽  
Compliance Programs ◽  
Commodity Futures Trading Commission ◽  
Practical Implications

Purpose To analyze the recent Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) whistleblower awards and to evaluate what issues may be important for in-house counsel in the future. Design/methodology/approach The article discusses the most recent whistleblower settlements and focuses on lessons learned for compliance. Findings The SEC continues to publicize substantial whistleblower awards in an effort to attract additional whistleblowers and gather information that may lead to successful enforcement actions. In addition, the CFTC, whose corresponding Whistleblower Program has been slow to issue awards has announced that it is ramping up its program. Practical implications Companies should ensure that they have vigorous compliance programs in place to prevent and detect potential securities violations and to respond immediately in order to mitigate penalties that may result from inadvertent violations. Originality/value This article identifies recent awards issued under Whistleblower Programs created under the Dodd-Frank Act and should be of interest to publicly traded companies and all entities regulated by the SEC and CFTC that may be targeted by potential whistleblowers.

SEC permits abbreviated tender and exchange offers for non-convertible high-yield and investment-grade debt securities

2015 ◽  
Vol 16 (3) ◽  
pp. 28-29
Author(s):  
Ian B. Blumenstein ◽  
J. Eric Maki ◽  
John T. Owen
Keyword(s):  
Design Methodology ◽  
High Yield ◽  
Content Type ◽  
Efficient Mechanism ◽  
Practical Guidance ◽  
Traditional Structures ◽  
Investment Grade ◽  
Practical Implications

Purpose – To advise companies of a recent SEC no-action letter relating to tender and exchange offers for certain debt securities. Design/methodology/approach – Reviews various conditions allowing an issuer to use a shortened timeframe in which certain debt tender/exchange offers need be kept open for as few as five business days. Findings – The abbreviated debt tender/exchange offer structure contemplated by the no-action letter provides a more efficient mechanism for conducting debt tender/exchange offers in certain circumstances. Practical implications – Issuers conducting a debt tender/exchange offer should consider whether the new abbreviated structure is more effective in achieving their objectives than the more traditional structures. Originality/value – Practical guidance from experienced securities regulatory lawyers that gives an overview of important developments in debt tender/exchange offer practice.

Sign in / Sign up

Export Citation Format

Share Document